CFE-Fraud-Prevention-and-Deterrence Exam Dumps - Certified Fraud Examiner - Fraud Prevention and Deterrence Exam

The G20/OECD Principles include:

“Guidance regarding board responsibilities, including establishing appropriate board structures, assigning clear responsibilities, and ensuring board accountability.”

The Fraud Risk Management chapter summarizes the components of COSO ERM 2017 and explains that review and revision concerns how well ERM capabilities and practices have increased value over time and how they will continue to drive value for the organization. The manual quotes this concept directly when discussing review and revision. This component is concerned with assessing substantial changes, reviewing risk and performance, and improving ERM practices as circumstances evolve. It is therefore the part of the framework most closely associated with continual reassessment and enhancement over time. Governance and culture, by contrast, address tone, oversight, and ethical values, while strategy and objective-setting concern alignment with mission and performance goals. Thus, option B is the correct answer according to the manual’s presentation of COSO ERM.

onflicts of Interest Under the ACFE Code of Professional Ethics:

Fraud examiners must avoid situations that compromise their objectivity, independence, or professional duties.

Disclosure of ownership does not eliminate the conflict of interest if it could impair objectivity.

Analysis of Other Options:

A, C, and D:All are clear conflicts of interest explicitly prohibited under the ACFE Code.

Conclusion:Option B is not prohibited under the ACFE Code but remains problematic if disclosure does not adequately address independence concerns.

COSO Definition of Internal Control:

COSO defines internal control as a process executed by an entity’s board, management, and personnel to provide reasonable assurance about achieving objectives in operations, reporting, and compliance.

Analysis of Options:

A. Corporate compliance:Corporate compliance focuses on adhering to laws and regulations, not the broader operational objectives.

B. Fraud risk management:This is a component of internal control, not its definition.

C. Risk assessment:This is a step within the internal control process but not the overarching process.

D. Internal control:Matches the COSO definition accurately.

Conclusion:Internal control is the correct answer as defined by COSO.

Fraud Risk Assessment Objectivity:

The assessment must remain unbiased, but any prior disagreements or conflicts may highlight areas where policies or procedures are unclear, increasing fraud risks.

Why C is Correct:

Incorporating disagreements provides context to evaluate risks objectively, ensuring that all relevant factors are considered without bias.

Why Other Options are Incorrect:

A:Confronting Brandon could create further conflict without adding value.

B:Delegating the task unnecessarily avoids responsibility.

D:Automatically designating the area as high-risk lacks justification and could undermine credibility​​.

References for All Questions:

ACFE Code of Professional Ethics and Fraud Examination Guide​​.

ISO 31000:2018 guidelines for risk management​​.

Criminological theories related to crime causation and fraud risk assessments​​.

Comprehensive and Detailed in Depth Explanation:

For a fraud reporting program to be effective, employees must clearly understand how to use it. Providing specific and user-friendly reporting methods, such as hotlines, email addresses, or online forms, increases accessibility and usage. Options A and D discourage reporting, while B limits it unnecessarily, especially in cases where supervisors may be involved.

Importance of Hiring Ethical Individuals:

Ethical hiring practices are foundational to an effective compliance program. Employees with a high measure of discretion can significantly impact organizational behavior and risk.

Pre-hiring background checks, ethical screening, and thorough interviews help mitigate the risk of unethical behavior.

Conclusion:For a compliance program to be effective, management must ensure ethical hiring practices.